This week AT&T, Inc. (T), Cablevision Systems Corp. (CVC), Comcast Corp. (CMCSA), Time Warner Cable, Inc. (TWC), and Verizon Communications Inc. (VZ) will become test candidates for a new system of warnings to customers who file share. The rollout will last about two months, and by the end pirating customers may be in for unpleasant surprises.

The media industry will largely be "footing the bill" for the piracy policing. Their efforts rely on a company called MarkMonitor, which trolls BitTorrent networks, collecting IP addresses. MarkMonitor recently became a subsidiary of Thomson Reuters Corp. (TRI) in July, ending over a decade of independence. The company has made a name for itself fighting against illicit online drug marketplaces and so-called travel agency "brand-jacking". Now it sets its sights on the biggest challenge of them all -- trying to sneak around the underbelly of the peer-to-peer piracy and data-mine information on its participants.

The information collected will be anonymized and sent to the ISPs, who will in turn match it to their customers and send out warnings. The initial warning will be a "friendly" notice with suggestions of how to obtain content legally and tips on securing your connection (in case the infringer is a third party).

If customers do not heed the warning and continue to show up on MarkMonitor's list, they will next be asked to sign a waive acknowledging they received the latest warning. After that, additional warnings will earn "mild" punishments, including throttling the user's connection or forcing them to watch "educational" anti-piracy programming in order to keep connected.

Digital pirates will face warnings and mile punishments, thanks to a new alliance between ISPs and big media.

Users who feel they have been unjustly notified can challenge the notice -- but it will cost them. The cost per challenge is a one-time fee of $35 USD.

No one knows quite how well the system -- geared at annoying pirates enough to change their ways -- will work. But assuming that big media sticks to its promise of not terminating file sharers, it's at least a step forward from the punitive and unaccountable tactics used in the past -- tactics that hurt both customers and the media industry's pocketbooks.

One question is whether it is harmful in the first place. After all, copying illicitly a digital work is somewhat different than stealing a physical commodity. Some evidence indicates that piracy is not truly costing the industry any revenue (in the sense that customers often use piracy to sample, and would not necessarily buy the content legitimately in the absence of piracy). Some evidence even points to piracy increasing revenues, evidenced by studies that show pirates purchase more music legally than their peers.

So what exactly are the best ways to stop online piracy? Much promise exists in the option of ad-supported content models, such as internet radio. But the challenge is getting big media on board with these kinds of new technologies, when their executives are often fearful that they will hurt their company's bottom line.

A final question is whether the industry will keep its promise regarding no terminations, or whether this is simply a prelude to more draconian measures. In a recent leaked letter the RIAA expressed its desire to terminate pirates. But of course, such a plan would likely be resisted by the ISPs who balk at the idea of turning away paying customers. In the face of that resistance it's unclear whether big media could manage to push any sort of more punitive plan into place.